The Burlington Northern Railroad was a United States-based railroad company operating between 1970 and 1996. Its successor-in-interest is the BNSF Railway, which operates the trackage formerly owned by the Burlington Northern. It is the second largest railroad in the U.S. In November 2009 BNSF was bought for $34 billion by Warren Buffett's Berkshire Hathaway, a conglomerate holding company headquartered in Omaha, Nebraska, that oversees and manages a number of subsidiary companies. [1]

As of 2011, coal accounts for more than a quarter of the company’s revenues, and 90 percent of the coal it hauls is from the Powder River Basin.[2]

Support for the American Legislative Exchange Council

ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.

History

Burlington Northern Railroad was the product of a March 2, 1970, merger comprising the Great Northern Railway, the Northern Pacific Railway, the Chicago, Burlington and Quincy Railroad, and the Spokane, Portland and Seattle Railway. Consent for this merger came only on the fourth attempt dating back to the days of James J. Hill, but for many years they shared a headquarters building in Saint Paul, Minnesota, until the merger was finally approved. On November 21, 1980, the former St. Louis - San Francisco Railway was acquired. In 1981, corporate headquarters of parent Burlington Northern Inc. were moved to Seattle, Washington, and in 1988, after its non-rail operations were spun off as Burlington Resources, to Fort Worth, Texas. On December 31, 1996, Burlington Northern merged with the Atchison, Topeka, and Santa Fe Railway to form the Burlington Northern Santa Fe Railway, whose name was later shortened to BNSF Railway.[4]

Coal accounts for one-quarter of BNSF’s revenue. However, if the use of coal declines, BNSF said it could still play a large role in moving other goods, as rail is seen as more fuel- and cost-efficient than trucks.[6]

Freight

BNSF is the biggest hauler of corn and coal for electricity. It also carries everyday items such as refrigerators, clothing, and TVs, with 31 percent of its 2009 profits from shipments of consumer products, moved from the West to major hubs like St. Louis, Kansas City, and Chicago. BNSF's next most important segment was coal, followed by industrial products like farm equipment, lumber, and chemicals. BNSF also hauls corn, wheat, and soybeans, much of it exported to China. Burlington Northern serves more of the nation's major grain-producing regions than any other railroad.[1]

Coal

Almost 60 percent of coal in the United States is transported at least in part by train, with coal transportation accounting for 44 percent of rail freight ton-miles.[7]

According to its website, the coal hauled each year by BNSF Railway could produce more than 10 percent of the nation's total electricity. BNSF supplies 60 utilities in 28 states, as well as power plants in Canada, Mexico, Asia, and Europe. In 2008, BNSF transported 297 million tons of coal.[8] 90% of the coal BNSF transports is mined in the Powder River Basin.[9]

Union Pacific (UP) and BNSF are the two major Class I railways that operate in the coal-rich Powder River Basin. Only two railroads – the BNSF and Union Pacific – transport Powder River Basin coal westward. Coal trains typically employ 100-125 cars to haul Powder River Basin coal to electric utilities. The rail cars do not carry other commodities and return back to the mines empty. Coal from Powder River Basin mines in Wyoming and Montana is transported through Montana on the BNSF main line from both mines in Wyoming and Montana to Laurel, Montana.[7]

In the first six months of 2010, 3.5 million tons of coal was shipped from Powder River Basin Coal mines to Oregon and Washington for use in electrical generation and combined heat and power applications.[7]

Formerly known as the Bull Mountain mine, the Signal Peak mine, operated by Signal Peak Energy, was reopened for operation in September of 2009. The mine has newly built access to the Burlington Northern Santa Fe railroad that leads to the BNSF's main rail line in Broadview, Montana. The 35 mile line was built at a cost of $105 million.[10]

"This is a mine that will add 25 percent to the over all coal mining that we do in Montana," stated Montana Governor Brian Schweitzer at the mine's reopening.

The Boich Group and FirstEnergy invested $400 million to reopen the mine, which will produce an estimated 12.5 million tons of annually by the end of 2010. On December 3, 2009 the companies announced that they planned to sell much of the coal to growing Asian markets.[11]

Exporting PRB coal

In 2008, BNSF CEO Matt Rose said BNSF is talking to potential customers abroad about exporting Powder River Basin coal, particularly to Asia, and looking at the logistical challenges of exporting large quantities.[7]

A 2011 Western Organization of Resource Councils Report, "Exporting Powder River Basin Coal: Risks and Costs" notes that an export market of 140 million tons a year of coal would require around 60 unit trains traveling to or from the West Coast and the Powder River Basin every day: "Again, for comparison, current volume of traffic is no more than 10 unit trains per day. Nearly all of the rail line from the Powder River Basin to the West Coast would eventually need upgrades to carry additional weight or expand additional tracks to accommodate an export market of this size."[7]

The report continues: "a coal export facility with the capacity to ship 20-30 million tons per year of Peabody Powder River Basin coal would result in the export of 35-53 million tons of CO2 per year. Exporting 140 million tons a year would produce roughly 280 million tons of CO2 per year."[7]

BNSF and UP invested more than $4 billion to increase capacity in recent years. BNSF laid nearly 3,000 miles of track from 2007 to 2009.[7]

In early May 2011 it was announced that Burlington Northern Santa Fe railway would impose a new tariff for coal dust suppression on its coal train fleet. The tariff came after a March 2011 ruling by the U.S. Surface Transportation Board. The ruling capped a year long battle between the railroad and utilities over just who is responsible to pay for dust suppression along thousands of miles of rail used to connect the Powder River Basin to coal-fired power plants across the U.S. Coal customers will now have to pay an extra few million dollars per year to help control coal dust from loaded trains leaving Wyoming.[12]

Rail expansion

In July 2011, billionaire Forrest E. Mars, Jr. reached an agreement with BNSF Railway and coal giant Arch Coal to buy one-third of the Tongue River Railroad. The purchase would prevent the construction of a proposed railway along major stretch of the Tongue River Valley in southeastern Montana - from Decker near the Wyoming border, to the southern border of the Northern Cheyenne Indian Reservation near O'Dell Creek road near Birney - but would allow for the portion of the proposed railroad between O'Dell road, approximately 10 miles south of Ashland, and Miles City. Mars said he would no longer help fund ongoing legal challenges or future litigation related to the controversial 130-mile long railroad that would transport coal from Montana to Midwestern power plants and Asia.[13]

Connections to the George W. Bush Administration and Election Campaigns

Greening Earth Society

BNSF was also a "key contributor" to the Greening Earth Society, a coal-industry front group that formed in 1997.[14] The group, which appears to have collapsed in 2005, claimed that greenhouse gas emissions are a good thing because they will lead to greater plant growth and a greener environment. It claims that this viewpoint constitutes a "scientifically-sound perspective on the increasing atmospheric carbon dioxide."[17]